Brexit Agreement

Trade Deal Optimism Fades, GBPUSD Retreats From Five-Month Highs

Asian Indices ended higher today as global equities sentiment picking up a notch in progress around the Brexit deal. Doubts emerged about the US and China partial trade deal. China wants to proceed with further discussions before signing the phase one trade deal.

Last week, Fed Chair Jerome Powell signalled further interest rate cuts and the resumption of bond purchases. Traders increased their bets that the Fed will slash interest rates at its next meeting in October to protect the economy from slowing growth and the effects of the trade tensions. The Hang Seng index is trading 0.45% higher at 26,620. The Shanghai Composite is 0.21% lower at 2,984, while in Singapore, the FTSE Straits Times is 0.70% higher at 3,138. The ASX 200 in Australia trades 0.80% higher at 6,706.

European indices started lower the day, DAX trading 0.06 lower at 12,624, CAC40 is 0.26 per cent lower at 5,687, while the FTSE MIB in Milan is 0.03 per cent lower at 22,360. In London, FTSE 100 is trading 0.29% lower at 7,189. The UK is scheduled to leave the EU on October 31.

In commodities markets, crude oil trades 0.28 per cent higher at $52.96 as global growth worries weigh on crude. Brent oil is trading 0.26% higher at $58,89 per barrel as oil world supply will be affected by the global slowdown. Gold trades lower at 1,484, as the momentum turns bearish after the price trades below the 50-day moving average. On the upside, strong resistance will be met at 1,555.13 yearly high while support is at 1,458, the recent low.       

In cryptocurrencies, Bitcoin (BTCUSD) momentum is neutral now as BTC trades lower at 8,153, hitting the daily low at 8,042 and the daily high at 8,167. Bitcoin short term momentum is neutral now as it trades above the 200-day moving average. Immediate support for BTC stands now at $7,686 recent low, while the next support stands at 7,406 the low from June 2nd. On the upside, strong resistance now stands at 8,801 recent high and then at 9,000 round figure. Ethereum (ETHUSD) trades lower at 178,45 with capitalisation now to 19.55 billion, and on the upside, the immediate resistance stands at 317 high while the support stands at 136 the low from May 6th. Litecoin (LTCUSD) trades lower at 54.27. The crypto market cap capitalization now stands above $222.61 billion.

On the Lookout: Japan Industrial Production (YoY) came in at -4.7% in line with forecasts for August. The Australian weekly consumer confidence came in at 110.9 previous reading was at 112.3. 

The central bank of China set the Yuan rate (USDCNY) at 7.0708 versus yesterday’s settlement at 7.0725.  

Trading Perspective: In forex markets, USD index trades 0.01 per cent lower at 98.31, the Aussie dollar trades 0.27 per cent lower at 0.6733, while NZDUSD trades 0.36% lower at 0.6270.

five-month highs
GBPUSD Daily Chart

GBPUSD trades 0.23% lower at 1.2750 retreating from five-month highs as we are getting closer to the Brexit deadline. Major support now stands at 1.2078 recent low which if broken, might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.2636 recent high, while more offers will emerge at 1.2711 the 200-day moving average.

In Pound futures markets open interest increased by 3,500 contracts, volume increased by around 158.200 futures contracts.

EURUSD trades 0.01% lower at 1.1031, as the pair trades for the fifth day out of the descending channel. Immediate resistance for the pair stands at 1.1037, the 50-day moving average, and then at 1.1137, the 100-day moving average. On the downside, immediate support stands at 1.1003 yesterday’s low and then at 1.0835, the low from 2017.

In euro futures markets open interest decreased by 2.500 contracts, the volume also decreased by around 131.300 futures contracts.

five-month highs
EURUSD Daily Chart

USDJPY is trading 0.15% lower at 108.69, having hit the daily low at 108.59 and the daily high at 108.86. USDJPY pair will find support at 104.44 the low from August 23rd. On the upside, immediate resistance for the pair now stands at 108.86 the high from yesterday, and then at 109.06, the 200-day moving average.

In Yen futures markets, open interest increased by 3.300 contracts. Volume increased by around 40,000 futures contracts.

USDCAD is trading 0.09% higher at 1.3210. The pair will find immediate support at 1.3017 the YTD low while extra support stands at 1.30 round figure. On the upside, immediate resistance now stands at the 1.3356 high from September 3rd before an attempt to 1.3450 high from 31st May.